“Mt. Gox, once the world’s largest bitcoin exchange, has gone offline, apparently after losing hundreds of millions of dollars due to a years-long hacking effort that went unnoticed by the company.

The hacking attack is detailed in a leaked “crisis strategy draft” plan, apparently created by Gox and published Monday by Ryan Selkis, a bitcoin entrepreneur and blogger (see below). According to the document, the exchange is insolvent after losing 744,408 bitcoins — worth about $350 million at Monday’s trading prices. The plan paints a bleak picture of the exchange’s finances and outlines an arbitrage scheme to restore the exchange to solvency.”

“As with any new industry, there are certain bad actors that need to be weeded out, and that is what we are seeing today. We are confident, however, that strong bitcoin companies, led by highly competent teams and backed by credible investors, will continue to thrive, and to fulfill the promise that bitcoin offers as the future of payment in the Internet age.”

Irving Wladawsky-Berger, Citigroup strategic advisor and former researcher for IBM, has written a very well-reasoned piece on his view of Bitcoin. In his post, Reflections on Bitcoin, Wladawsky-Berger comes to three primary conclusions. He says:

“So, after reading and reflecting on these various articles, here is how I would now summarize my views on Bitcoin:

The cryptographic advances and technologies underlying Bitcoin will likely play a major role in the development of the Internet of Money, that is, an Internet era, digital money ecosystem. But, as is the case with all complex platforms, its architecture, protocols and governance will have to evolve. It remains to be seen whether the resulting platform will still be called Bitcoin or something else will have taken its place.

For the foreseeable future, the bulk of the money flowing through such a digital money ecosystem will continue to be based on existing currencies. Digital currencies may play important niche roles. It’s not clear at this point whether Bitcoin itself will be one of the surviving digital currencies.

Given the central role played by money in all aspects of the economy, society and our personal lives, governments will continue to regulate its use, whether based on existing or new digital currencies.”